KPMG’s boards in the UK and Germany told partners last Thursday of the proposal to merge the two arms. In the process it launched frenzied discussion about other Big Four moves in the same direction.

Speculation that PricewaterhouseCoopers could announce similar moves, alongside Deloitte’s purchase of its Swiss member firm, led to a sense of inexorable momentum behind such mergers.

With a projected turnover for the UK and German firms in excess of £2bn in the current year, KPMG Europe LLP will be the largest accountancy firm on the continent.

KPMG also confirmed it was in discussions with other member firms in Europe. ‘We hope there will be a second wave of firms joining,’ a spokesman said.

The president of the board of KPMG’s French firm, Jean-Luc Decomoy, told Les Echos, the French business paper: ‘Everyone thinks it is a good idea, but nobody has evaluated the risks.’

The profits would be put into a single pool, KPMG said, and divided up beween the partners of both Germany and the UK on the basis of the contribution they had made. There will be no job losses.

KPMG partners have so far indicated their approval of the move.

One senior partner described it as a ‘great step forward’, adding that it would be likely to be ‘lucrative’.

The moves sparked feverish speculation about which firm would be next to merge, with PwC keeping tight-lipped about its plans.

John Connolly, chief executive of Deloitte, which earlier this week bought its Swiss counterpart, said: ‘We look at this from time to time.’

A spokeswoman for PwC said: ‘PwC is committed to its strategy of leading through quality, promoting seamless client service and effective management of risk.’